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SBA Lenders: Beware of BSA
Earlier this year, the Small Business Administration (SBA) introduced three new standard operating procedures (SOPs), significantly impacting small business lenders. Effective Aug. 1, 2023, lenders were required to start complying with the new guidelines (SOP 50 10 7, SOP 50 56 1 and SOP 50 57 3).
Amongst the SOPs, a key item to note (referenced in SOP 50 57 3) relates to the reporting of SBA 7(a) loan extensions to an appropriate credit reporting agency, including Dun & Bradstreet, Experian or Equifax. Be sure to provide information necessary to establish the identity of the borrower, such as:
Note, this reporting only applies to loan borrowers, not guarantors. Furthermore, once you have done the initial reporting, lenders must report SBA loan servicing and liquidation activity throughout the life of the loan. While this reporting must be performed on a quarterly basis, more frequent updates may be provided as necessary to maintain the integrity and accuracy of the information being reported.
While many lenders anticipate more technical updates to come, it’s critical to remain compliant with the existing SOPs to avoid any violations. Consider partnering with a qualified SBA loan reviewer, such as those at Doeren Mayhew, to have a detailed independent loan review performed to confirm compliance. Doeren Mayhew also offers a review software, GOLoan Review that helps to verify your 7(a) loans are compliant with the new SOPs and documents the entire review process with a workpaper. Learn more by scheduling a demo today.
This publication is distributed for informational purposes only, with the understanding that Doeren Mayhew is not rendering legal, accounting, or other professional opinions on specific facts for matters, and, accordingly, assumes no liability whatsoever in connection with its use. Should the reader have any questions regarding any of the news articles, it is recommended that a Doeren Mayhew representative be contacted.
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